By Justine Irish D. Tabile, Senior Reporter

THE NATIONAL Government’s (NG) debt service bill surged more than sixfold in February, mainly due to a massive increase in domestic amortization, data from the Bureau of the Treasury (BTr) showed.

Debt payments jumped by 725.7% to P430.64 billion in February from the P52.15 billion recorded a year earlier.

Month on month, debt service went up by 212.8% from P137.67 billion in January.

Debt service refers to payments made by the NG on its domestic and foreign debt.

In February, the government’s repayment of its loan principal or amortization accounted for the bulk or 88.6% of total debt service, while the rest went to interest payments.

Principal payments sharply increased by 10,191.5% to P381.71 billion in February from P3.71 billion a year ago.

This was mainly due to the surge in amortization on domestic debt to P378.51 billion in February from just P121 million in the same month in 2025.

“Domestic amortization reflects actual principal repayments to creditors, including those serviced by the BSF (Bond Sinking Fund),” the Treasury said.

External principal payments, on the other hand, declined by 10.8% to P3.2 billion in February from P3.59 billion in the same month last year.

Meanwhile, interest payments inched up by 1% to P48.93 billion in February from P48.45 billion in the same month a year earlier.

Domestic interest payments fell by 11.9% to P37.08 billion in February from P42.07 billion a year ago. Broken down, P19.78 billion went to interest payments for fixed-rate Treasury bonds, P11.95 billion for retail Treasury bonds, and P4.63 billion for Treasury bills.

Interest payments on external debt jumped by 85.8% to P11.85 billion in February from P6.38 billion a year ago.

For the first two months of 2025, the government’s debt service surged by over three times or 258.2% to P568.31 billion from P158.66 billion in the same period last year.

Amortization payments for the January-to-February period jumped by 6,669.8% to P391.57 billion from P5.78 billion a year ago.

Principal payments accounted for 68.9% of the total debt payments in the first two months of 2026.

Principal payments on domestic debt went up by 88,166.4% to P386.61 billion from P438 million, while those for external debt slipped by 7.3% to P4.96 billion from P5.34 billion.

On the other hand, interest payments rose by 15.6% to P176.75 billion as of end-February from P152.88 billion in the same period a year ago.

Interest payments on domestic debt jumped by 15.2% to P131.68 billion from P114.35 billion, while external debt payments went up by 17% to P45.06 billion from P38.53 billion.

“(The increase is) largely due to lump-sum and timing-related payments, particularly large maturities or scheduled principal repayments falling within the month,” Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said in a Viber message.

“Debt service figures tend to be volatile and should be interpreted in the context of the overall annual financing program,” he added.

In the Budget of Expenditures and Sources of Financing 2026, the government has set a P2-trillion debt service program for the year, of which P1.05 trillion is for principal payments and P950 billion is for interest payments.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said that the surge is largely due to the P232-billion 7-year Treasury bond that matured on Feb. 14.

“Furthermore, the higher US dollar-peso exchange rate led to higher debt servicing in pesos of US dollars and other foreign currency-denominated debts, both principal and interest payments,” he said in a Viber message.

Mr. Ricafort said wider budget deficits, which are partly due to higher prices that have inflated government expenditures in recent years, also contributed to increased debt servicing costs over time.

The National Government’s budget deficit inched down by 0.14% to P171.2 billion in February from P171.4 billion in the same month a year ago.

Inflation rose 2.4% in February, the quickest pace since 2.9% in January 2025.

For the coming months, Mr. Ricafort said that the NG debt service bill could go up amid the maturity of a P282-billion 5-year Treasury bond by April 8.

“Higher US dollar-peso exchange rate, higher prices that could bloat the budget deficit, and higher interest rates since the war in the Middle East started on Feb. 28 could lead to higher debt servicing costs, both principal and interest payments, going forward,” he added.

Mr. Rivera said debt payments are expected to remain “elevated but manageable.”

“While higher global interest rates may keep debt servicing costs up, the key is that these are planned obligations, and the government is likely to continue managing them through a mix of domestic and external borrowing and prudent debt strategy,” he added.

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